The August 2021 historic allocation of US$650 billion in Special Drawing Rights (SDRs) offers a critical and sizable new source of financing to help African countries to respond to the converging crises of COVID-19, climate change and food insecurity. SDRs provide a much needed injection of liquidity, without adding to debt burdens.

However, SDRs are allocated according to a country’s IMF quota. That means advanced economies — which have the least need — received the lion’s share of the US$650 billion. Africa received only 5% of the total, roughly US$33 billion in SDRs. High-income countries could channel their SDRs to nations that need them more. This channeling of SDRs is a crucial step to address  global inequality and the growing financing gaps between countries. 

The majority of African governments have disclosed their plans for these new resources, from boosting their foreign exchange reserves to enhancing health and social protection systems, to paying off debt.

What are SDRs?

Special Drawing Rights are a type of reserve asset issued by the International Monetary Fund to all countries to help supplement countries’ official reserves. SDRs are not cash, but they can be traded for hard currency such as dollars, pounds, or euros.

How can they be used?

SDRs are a useful tool to plug fiscal gaps, meet external debt obligations, or address foreign exchange shortages. For example, if Liberia is facing a foreign currency shortage, it can voluntarily sell a portion of its SDRs to France in exchange for euros to pay for imported goods, such as medical supplies.

Tracking the use of Special Drawing Rights

ONE is tracking how African countries are intending to use their newly allocated SDRs. The map shows African countries coloured by their current SDR holdings, shown as a percentage of their total SDR allocations. Information on countries’ cumulative and current holdings is available by hovering/taping on each country.

Countries may use SDRs in different ways. Some may convert them to other currencies and hold on to the foreign reserves. Others may use SDRs to service debt. SDRs can also be converted to other currencies and spent.

What ONE is calling for

• Advanced economies should commit to a rapid channeling of at least 30% of their SDRs to reach the global US$100 billion ambition. These commitments must be transparently recorded and tracked by the IMF for accountability. Beyond this, advanced economies should pledge to recycle more SDRs once new mechanisms are in place. This should be based on the scale of need in low- and middle-income countries.
• For their part, African governments should commit to open and transparent processes that will allow citizens and civil society organizations, as well as the legislature, to clearly follow how SDRs are used. This includes publicly disclosing plans, periodically publishing progress reports, and conducting an assessment of how the implemented activities and results align with objectives.

Are advanced economies channeling their SDRs?

We are actively tracking developed economies’ commitments to channel a portion of their SDRs. This table is updated regularly using publicly available information, press statements, and other official sources. The G20 does not provide a country breakdown of pledges and only discloses the total amount, which it puts at $87 billion (February 2023). However, this total includes the U.S. pledge of $21 billion; our table total excludes this amount because the U.S. Congress has not authorised the pledge.